Denison Reports Results from Wheeler River PFS, Including +275% Increase IN Pre-Tax NPV and Selection of Isr Mining Method FOR Phoenix Deposit
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Denison Mines Corp.
1100 – 40 University Ave
Toronto, ON M5J 1T1
www.denisonmines.com
@DenisonMinesCo
PRESS RELEASE
DENISON REPORTS RESULTS FROM WHEELER RIVER PFS,
INCLUDING +275% INCREASE IN PRE-TAX NPV AND SELECTION
OF ISR MINING METHOD FOR PHOENIX DEPOSIT
Toronto, ON – September 24, 2018 Denison Mines Corp. (“Denison” or the “Company”) (DML: TSX, DNN:
NYSE American) is pleased to announ ce the results of the Pre-Feasib ility Study (“PFS”) on its flagship
Wheeler River uranium project (“Wheeler River”) in northern Saskatchewan. The PFS has been completed
in accordance with NI 43-101 and is highlighted by the selection of the in-situ recovery (“ISR”) mining
method for the development of the Phoenix deposit, with an estimated average operating cost of $4.33
(US$3.33) per pound U3O8.
The PFS considers the potential economic merit of co-developing the Phoenix and Gryphon deposits. The
high-grade Phoenix deposit is designed as an ISR mini ng operation, with asso ciated processing to a
finished product occurring at a plant to be built on si te at Wheeler River. The Gryphon deposit is designed
as an underground mining operation, utilizing a conventional long hole mining approach with processing of
mine production assumed at Denison’s 22.5% owned McClean Lake mill. Taken together, the project is
estimated to have mine production of 109.4 million pounds U3O8 over a 14-year mine life, with a base case
pre-tax Net Present Value (“NPV”) of $1.31 billion (8% disc ount rate), Internal Rate of Return (“IRR”) of
38.7%, and initial pre-production capital expenditures of $322.5 million.
The base-case economic analysis assumes uranium sales are made at UxC Consulting Company, LLC’s
(“UxC”) annual estimated spot price for mine production from the Phoenix deposit (from ~US$29/lb U 3O8 to
US$45/lb U3O8), and a fixed price for mine production from the Gryphon deposit (US$50/lb U3O8).
Using the same price assumed for the project’s 2016 Preliminary Economic Assessment (“2016 PEA”), a
fixed uranium price of US$44/lb U 3O8 (“PEA Reference Case”), the PF S produces a combined pre-tax
project NPV of $1.41 billion – representing a roughly 275% increase from the $513 million pre-tax project
NPV estimated in the 2016 PEA.
The PFS is prepared on a project (100% ownership) and pre-tax basis, as each of the partners to the
Wheeler River Joint Venture (“WRJV”) are subject to di fferent tax and other obligations. After-tax results
attributable to Denison’s ownership interest are provided under the heading “Indicative Denison Post-Tax
Results”. All amounts are in Canadian dollars unless otherwise noted.
David Cates, President and CEO of Denison, commented “The selection of ISR mining for the high-
grade Phoenix deposit is a defining moment for our Company and a potentially transformational
development for the future of uranium mining in th e Athabasca Basin – bringing the world’s lowest
cost uranium mining method to the jurisdiction hosting the world’s highest-grade uranium
deposits.”
Mr. Cates further added, “Based on an estimated production cost of US$3.33/lb U 3O8 and relatively
modest initial capital costs, the Phoenix operation is expected to have superior leverage to an
anticipated recovery of the spot price of uranium – owing to the fact that the operation may not
require a book of long-term contracts to support a development decision. The Gryphon deposit is a
perfect complement to Phoenix, as it is expected to supply additional low-cost pounds, financed
through cash flow from Phoenix, at a time when the uranium market is expected to be in a
significant supply deficit.”
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Conference Call
The Company will host a conference call and live webi nar on Tuesday September 25, 2018 at 8:15 a.m.
Eastern Daylight Time. During the call, management will provide an overview of the results of the PFS and
will also accept questions from analysts and other participants. To join the call please dial (604) 638-5340
(Local/International) or 1-800-319-4610 (North America Toll Free).
To access the conference call and live webinar via the internet, please use the following link prior to the
start of the call: http://services.choruscall.ca/links/denisonmines20180925.html
A recorded version of the conference call will be ava ilable on our website (www.denisonmines.com) shortly
after the call, or by telephone via the following pl ayback numbers (604) 674-8052 (Local/International) or
1-855-669-9658 (North America Toll Free) using the access code, 2611.
Pre-Feasibility Study Highlights
Phoenix delivers exceptional operating costs and manageable initial capex with ISR
Mine life 10 years (6.0 million lbs U3O8 per year on average)
Probable reserves(1) 59.7 million lbs U3O8 (141,000 tonnes at 19.1% U3O8)
Average cash operating costs $4.33 (US$3.33) per lb U3O8
Initial capital costs $322.5 million
Base case pre-tax IRR(2) 43.3%
Base case pre-tax NPV8%(2) $930.4 million
Base case price assumption UxC spot price(3) (from ~US$29 to US$45/lb U3O8)
Operating profit margin(4) 89.0% at US$29/lb U3O8
All-in cost(5) $11.57 (US$8.90) per lb U3O8
(1) See below for additional information regarding Probable reserves;
(2) NPV and IRR are calculated to the start of pre-pr oduction activities for the Phoenix operation in 2021;
(3) Spot price forecast is based on “Composite Midpoint” scenario from UxC’s Q3’2018 Uranium Market Outlook (“UMO”)
and is stated in constant (not-inflated) dollars;
(4) Operating profit margin is calculated as uranium revenue less operating costs, divided by uranium revenue.
Operating costs exclude all royalties, surcharges and income taxes;
(5) All-in cost is estimated on a pre-tax basis and includes all project operating costs and capital costs, divided by the
estimated number of pounds U3O8 to be produced.
Gryphon leverages existing infrastructure and provides additional low-cost production
Mine life 6.5 years (7.6 million lbs U3O8 per year on average)
Probable reserves(1) 49.7M lbs U3O8 (1,257,000 tonnes at 1.8% U3O8)
Average cash operating costs $15.21 (US$11.70) per lb U3O8
Initial capital costs $623.1 million
Base case pre-tax IRR(2) 23.2%
Base case pre-tax NPV8%(2) $560.6 million
Base case price assumption US$50 per pound U3O8
Operating profit margin(3) 77.0% at US$50/lb U3O8
All-in cost(4) $29.67 (US$22.82) per lb U3O8
(1) See below for additional information regarding Probable reserves;
(2) NPV and IRR are calculated to the start of pre-pr oduction activities for the Gryphon operation in 2026;
(3) Operating profit margin is calculated as uranium revenue less operating costs, divided by uranium revenue.
Operating costs exclude all royalties, surcharges and income taxes;
(4) All-in cost is estimated on a pre-tax basis and includes all project operating costs and capital costs, divided by the
estimated number of pounds U3O8 to be produced.
Selection of ISR mining method for high-grade Phoenix deposit – Following the completion of
the 2016 PEA, the Company evaluated 32 alternate mining methods to replace the high-cost Jet
Bore Mining System (“JBS”) assumed for the Phoenix deposit in the 2016 PEA. The suitability of ISR
mining for Phoenix has been confirmed by significant work completed in the field and laboratory –
including drill hole injection, permeability, metallurg ical leach, agitation, and column tests. Results
demonstrate high rates of recovery in both extr action (+90%) and processing (98.5%) following a
simplified flow sheet that precipitates uranium di rectly from the uranium bearing solution (“UBS”),
without the added costs associated with ion exchange or solvent extraction circuits.
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Novel application of established mining technologies – Given the unique geological setting of the
Phoenix deposit, straddling the sub-Athabasca unco nformity in permeable ground, the project
development team has combined the use of exis ting and proven technologies from ISR mining,
ground freezing, and horizontal directional drilling to create an innovative model for in situ uranium
extraction in the Athabasca Basin. While each of the technologies are well established, the
combination of technologies results in a novel mining approach applicable only to deposits occurring
in a similar geological setting to Phoenix – which no w represents the first deposit identified for ISR
mining in the Athabasca Basin.
Environmental advantages of ISR mining at Phoenix – The Company’s evaluation of the ISR
mining method for Phoenix has also identified several significant environmental and permitting
advantages, namely the absence of tailings generation, the potentia l for no water discharge to
surface water bodies, and the potential to use the ex isting Provincial power grid to operate on a near
zero carbon emissions basis. In addition, the us e of a freeze wall, to encapsulate the ore zone and
contain the mining solution used in an ISR operat ion, eliminates common environmental concerns
associated with ISR mining and facilitates a controll ed reclamation of the site. Taken together, the
Phoenix operation has the potential to be one of the mo st environmentally friendly mining operations
in the world. Owing largely to these benefits, co nsultation with regulatory agencies and stakeholder
communities, to date, has been encouraging regarding the use of ISR mining.
Wheeler River Project
The Wheeler River project is the largest undeveloped uranium project in the eastern portion of the
Athabasca Basin region in northern Sask atchewan, Canada. The project is situated in close proximity to
important regional infrastructure, including the Provin cial electrical transmission grid and an all-season
Provincial highway. Since Denison became the oper ator of the project in 2004, two high-grade uranium
deposits have been discovered and now account for comb ined Mineral Reserves and Mineral Resources
as follows:
Probable Mineral Reserves of 109.4 million pounds U 3O8 (Phoenix 59.7 million pounds U 3O8
from 141,000 tonnes at 19.1% U 3O8; Gryphon 49.7 million pounds U 3O8 from 1,257,000 tonnes at
1.8% U3O8);
Indicated Mineral Resources (inclusive of Reserves) of 132.1 million pounds U 3O8
(1,809,000 tonnes at an average grade of 3.3% U3O8); plus
Inferred Mineral Resources of 3.0 million pounds U 3O8 (82,000 tonnes at an average grade of
1.7% U3O8).
The PFS does not include any economic analysis based on estimated Inferred Mineral Resources.
The project is a joint venture between Denison (63.3% and operator), Cameco (26.7%), and JCU (Canada)
Exploration Company Limited ("JCU") (10%). Denison is increasing its ownership in the project to up to
90% under two recently announced agreements with Ca meco. See Denison press releases dated January
10, 2017 and September 4, 2018 for details.
Pre-Feasibility Study Summary
The objective of the PFS is to assess the technical and economic viability of achieving uranium production
at Wheeler River. A team of technical experts, in cluding Stantec Consulting Inc. (Gryphon shaft and mine
design), Hatch Ltd. (McClean Lake mill modifications), Woodard and Curran Inc. (Phoenix ISR wellfield and
mineral processing designs), Newmans Geotechnique Inc. (Phoenix ground freezing design), SRK
Consulting (Environmental and social considerations, including water treatment plant design), RPA Inc.
(Mineral Resource estimates), and ENGCOMP Engineer ing and Computing Professionals Inc. (Surface
infrastructure design), have been retained by Denison to contribute to, and author, the PFS for the Wheeler
River project. The conclusion of the PFS process follows months of engineering and trade-off studies
carried out by the Company after the completi on of the 2016 PEA. The results from the 2016 PEA
informed the Company’s focus during the PFS process and ultimately l ed to the determination that a new
mining method was warranted for the development of the Phoenix deposit.
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The Phoenix ISR operation and Gryphon underground operation are estimated to produce combined total
mine production of 10 9.4 million pounds U 3O8 over a 14-year mine life. Pre-production activities are
estimated to begin in 2021, assuming receipt of required regulatory approvals, with first production from the
Phoenix deposit expected in 2024.
Table 1 – Wheeler River PFS Financial Results (100% Basis)
Base case pre-tax NPV8%(1) $1.31 billion
Base case pre-tax “IRR (1) 38.7%
Base case pre-tax payback period(2) ~24 months
Initial capital costs(3) $322.5 million
Average annual mine production 7.8 million lbs U3O8
Mine life 14 years
Exchange rate(4) (US$:CDN$) 1:1.30
Discount rate 8.00%
(1) NPV and IRR are calculated to the start of pre-production activities for the Phoenix operation in 2021;
(2) Payback period is stated as num ber of months to pay-back from the start of uranium production;
(3) Initial capital costs for the Wheeler River project are the initial capital costs estimated for Phoenix;
(4) Exchange rate applied on uranium sales.
Table 2 – Wheeler River Reserve Statement (100% Basis)
Deposit Classification Tonnes Grade Lbs U 3O8
Phoenix Probable 141,000 19.1% 59.7 million
Gryphon Probable 1,257,000 1.8% 49.7 million
Total Probable 1,398,000 3.5% 109.4 million
Notes:
(1) Reserve statement is as of September 24, 2018;
(2) CIM definitions (2014) were followed for classification of mineral reserves;
(3) Mineral reserves for the Phoenix deposit are reported at the mineral resource cut-off grade of 0.8% U 3O8. The mineral
reserves are based on the block model generated for the May 28, 2014 mineral resource estimate. A mining recovery
factor of 85% has been applied to the mineral resource above the cut-off grade;
(4) Mineral reserves for the Gryphon deposit are estimated at a cut-off grade of 0.58% U 3O8 using a long-term uranium
price of USD$40/lb, and a USD$/CAD$ exchange rate of 0. 80. The mineral reserves are based on the block model
generated for the January 30, 2018 mineral resource estimate. The cut-off grade is based on an operating cost of
CAD$574/tonne, milling recovery of 97%, and 7.25% fee for Saskatchewan royalties;
(5) Mineral reserves include diluting material and mining losses;
(6) Mineral reserves are stated at a processing plant feed reference point;
(7) Numbers may not add due to rounding.
The PFS has been completed in accordance with NI 43-101, Canadian Institute of Mining, Milling and
Petroleum (CIM) standards and best practices, as well as other standards such as the AACE Cost
Estimation Standards. The NI 43-101 technical report, supporting the PFS results included in this news
release, is in the process of bei ng finalized and will be provided to the WRJV partners for their review in
connection with an upcoming management committee meeting and filed under Denison’s profile on SEDAR
within 45 days of this release. This press releas e expresses the views and opinions of Denison, as
operator of the WRJV, and does not necessarily represent the views of the individual WRJV partners.
Price Assumptions & Sensitivities
The base-case economic analysis assumes uranium sales from Phoenix mine production will be made
from time to time throughout production at UxC’s fo recasted annual “Composite Midpoint” spot price from
the Q3’2018 Uranium Market Outlook (“UMO”), which is stated annually in cons tant (non-inflated) 2018
dollars and ranges from ~US$29/lb U3O8 to US$45/lb U3O8 during the 10 year estimated life of the Phoenix
operation. For mine production from the Gryph on operation, a fixed price of US$50/lb U 3O8 has been
assumed for uranium sales.
The base-case pricing scenario is intended to be repres entative of how Denison expects to evaluate the
business case for advancing development of each of the proposed Phoenix and Gryphon operations. The
Phoenix operation is not expected to require substant ial contract base loading to justify development –
given estimated operating costs of US$3.33/lb U 3O8, resulting in highly attractive operating profit margins
(+90%) with the ability to absorb the price variability associated with the uranium spot market. While the
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Gryphon operation is also expected to have low operating costs (US$11.70/lb U 3O8), its overall cost profile
is considered to be more amenable to fixed (base escala ted) price contracts with nuclear energy utilities, in
order to reduce risk and justify a development decision.
Additional pricing scenarios are provided using a project wide fixed selling price of US$44/lb U 3O8 (the
“PEA Reference Case”), to facilitate comparison to the 2016 PEA, and at US$65/lb U3O8 (the “High Case”),
to illustrate the potential for the project to benefit from rising uranium prices.
Table 3 – Sensitivity of Wheeler River to Uranium Pricing Scenarios (100% Basis)
Base Case PEA Ref. Case High Case
Uranium price As above US$44.00/lb U 3O8 US$65.00/lb U 3O8
Pre-tax NPV8%(1) $1.31 billion $1.41 billion $2.59 billion
Pre-tax IRR(1) 38.7% 47.4% 67.4%
Pre-tax payback period(2) ~24 months ~ 15 months ~ 11 months
(1) NPV and IRR are calculated to the start of pre-pr oduction activities for the Phoenix operation in 2021;
(2) Payback period is stated as num ber of months to pay-back from the start of uranium production.
The Phoenix Operation
Overview
Phoenix is a unique high-grade Athabasca Basin deposit amenable to ISR mining;
Test results indicate strong ISR well field (+ 90%) and processing (98.5%) recoveries with UBS
concentrations in the 12 to 20 grams per litre (g/l) range – leading to simplified on-site processing
plant design, without ion exchange or solvent extraction circuits;
Expected mine life of 10 years with tota l mine production of 59.7 million pounds U 3O8 and an
annual average mine production rate of approximately 6.0 million pounds U3O8;
Estimated to have exceptionally low operating costs (US$3.33/lb U 3O8), and comparatively low
upfront capital costs for a large-scale uranium mining operation;
Opportunity to be one of the most environmentally friendly mining operations in the world, owing to
minimal surface disturbance, no tailings generatio n, potential for no water discharge, a controlled
restoration process, and access to the Provincial power grid – resulting in a potentially near zero
carbon emission mine site during operations;
Elimination of key ISR concerns by using a freeze cap to contain mining solutions during
operations and to facilitate the restoration process; and
Short timeline to production with the capability to scale production to meet market demands.
Table 4 – Phoenix Operation Summary of Economic Results
Base Case High Case
Uranium selling price UxC Spot Price(1) US$65/lb U 3O8
Operating profit margin(2) 91.4% 95.0%
Pre-tax NPV8%(3) (100%) $930.4 million $1.91 billion
Pre-tax IRR(3) 43.3% 71.5%
Pre-tax payback period(4) ~21 months ~ 11 months
(1) Spot Price is based on the “Composite Mi dpoint” spot price scenario from UxC’s UMO;
(2) Operating profit margin is calculated as aggrega te uranium revenue less aggregate operating costs, divided
by aggregate uranium revenue. Operating costs exclude all royalties, surcharges and income taxes;
(3) NPV and IRR are calculated to the start of pre-production activities for the Phoenix operation in 2021;
(4) Payback period is stated as num ber of months to pay-back from the start of uranium production.
Table 5 – Phoenix Operating Cost per Pound U3O8
CDN$ US$
Mining / Wellfield 0.75 0.58
Milling / Processing 1.97 1.51
Transport to converter 0.21 0.16
Site support and administration 1.40 1.08
Total Operating Costs per pound U3O8 $4.33 $3.33
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Table 6 – Phoenix Capital Costs ($ millions)
Initial Sustaining Total
Wellfield 63.7 35.4 99.1
ISR processing plant 50.9 4.6 55.5
Water treatment plant 1.3 18.7 20.0
Surface facilities 22.3 0.1 22.4
Utilities 6.5 0.8 7.3
Electrical 18.8 - 18.8
Civil & earthworks 44.3 1.3 45.6
Offsite infrastructure 8.0 - 8.0
Decommissioning - 27.5 27.5
Subtotal – Direct Costs 215.8 88.4 304.2
Indirect costs 28.3 5.7 34.0
Other (Owner’s) costs 14.2 - 14.2
Contingency 64.2 9.4 73.6
Total Capital Costs (100%) 322.5 103.5 426.0
Deposit & Geology
The Phoenix deposit is the highest-grade undeveloped ur anium deposit in the world, geologically situated
at or immediately above the unconformity between the Athabasca Basin sandstone and older basement
rocks, approximately 400 metres below surface. Miner alization has been defined over a strike length of
approximately one kilometre and is coincident with a si gnificant steeply dipping fault zone. A total of 196
drill holes have delineated two distinct zones (A and B) of high-grade uranium mineralization lying
horizontally along the unconformity. At a cut-off grade of 0.8% U 3O8 the Phoenix deposit is estimated to
contain Indicated Mineral Resources of 166,400 tonnes, at a grade of 19.14% U 3O8 for a total of 70.2
million pounds U3O8, plus Inferred Mineral Resources of 8,600 tonnes at a grade of 5.80% U 3O8 for a total
of 1.1 million pounds U3O8. For further details, see the Company’s report entitled "Technical Report with an
Updated Mineral Resource Estimate for the Wheele r River Property, Northern Saskatchewan, Canada"
dated March 15, 2018 (the “Resource Report”), as filed on SEDAR and available on the Company’s
website. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Selection of ISR Mining Method
After completion of the 2016 PEA, De nison initiated a detailed review of the development plan for the
Phoenix deposit – which had been designed as an underground mine using JBS mining as the extraction
technology. The 2016 PEA identified disadvantages asso ciated with JBS mining, including technical risk,
comparatively high operating and capital costs, as well as long pre-production construction timelines.
Accordingly, following completion of the 2016 PEA, Deni son initiated an extensive review process, seeking
suitable alternative mining methods for the Phoenix deposit. A total of 32 different mining methods were
identified, reviewed, and subsequently shortlisted through an increasingly rigorous evaluation process. ISR
mining was ultimately selected as the preferred mining method due to significant economic, environmental,
and technical advantages.
ISR Mining Process
ISR mining has become the industry leading low-cost uranium production method globally – following on
from initial use in the 1960s to extensive use at pres ent in Kazakhstan (the world’s largest and lowest cost
producer of uranium), the United States, China, Ru ssia, and Australia, amongst others. ISR mining is
amenable to uranium deposits in certain sedimentary formations and is well known in the industry for
comparatively minimal surface impact, high production flexibility, and low operating and capital costs. In
1998, ISR mining represented roughly 13% of global urani um production, increasing rapidly to the point
where today it is estimated to account for over 50% of global uranium production. There has been
continuous development and improvement of ISR mining techniques in past years, particularly in the two
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decades since the International Atomic Energy Agency (“IAEA”) published the Manual of Acid In-Situ Leach
Uranium Mining Technology (IAEA-TECDOC-1239).
ISR mining involves recovery of uranium by pumping a mining solution (also referr ed to as a “lixiviant”)
through an appropriately permeable orebody. The method eliminates the need to physically remove ore
and waste from the ground – thus eliminating the relat ed surface disturbance and tailings normally related
to underground or open pit operations. The mining soluti on dissolves the uranium as it travels through the
ore zone – effectively reversing the natural process that originally deposited the uranium. The mining
solution is injected into the ore zone through a series of four-inch cased drill holes called injection wells and
pumped back to surface via a similar series of recove ry wells. Once on surface, the UBS is sent to a
surface processing plant for the chemical separation of the uranium. Following the uranium removal, the
mining solution is reconditioned (often referred to as the barren mining solution) and returned back to the
well field for further production.
While ISR mining is not currently being used in Canada for uranium mining, the Phoenix deposit has all the
attributes necessary to be a successful ISR operation, as outlined below:
1. Mineralization that is situated in permeable ground, allowing the mining solution to travel from the
injection well through the orebody and ultimately back to surface via a recovery well;
2. Mineralization that is readily di ssolvable by the mining solution; and
3. Mineralization that is within a setting which allo ws for containment of the mining solution – such
that the mining solution can be recovered withou t contaminating the environment or being diluted
by natural ground water.
Many of the large undeveloped uranium deposits disc overed in the Athabasca Basin in recent years
(namely Arrow, Triple R, Gryphon, Millennium, and Ro ughrider) are hosted within basement rocks, which
are not amenable to ISR mining due to the low permeability of the host rock.
As ISR mining is a novel mining method for the Athaba sca Basin, there is risk that the Company may not
be able to complete ISR operations as outlined in the PFS and/or that the co sts could be materially
different than estimated.
Phoenix Freeze Cap
In conventional ISR operations, containment of the mining solution is typically achieved by naturally
impermeable bounding layers in the geological strata and/ or by creating a natural drawdown (via pumping)
of the water table towards the ore zone. At Phoeni x, there is a natural impermeable layer below the
deposit, in the form of a competent package of basement rocks, but the deposit is otherwise hydraulically
connected to the vast regional groun dwater system in the overlying sandstone formation that defines the
Athabasca Basin. To contain the mining solution within the ore zones, an artificial freeze cap is planned to
encapsulate the deposit. While this is a novel co ncept, ground freezing technology is well established
throughout the world and is already in use in the Athabasca Basin in different applications.
The freeze cap will be established by drilling parallel cased holes from surface, starting at either end of the
deposit and travelling horizontally along the long ax is of the deposit anchoring into the impermeable
basement rock on the opposite end of the deposit. This is expected to be achievable using modern
directional drilling techniques. Circulation of a low temperature brine solution through the cased drill holes
will freeze the groundwater within the sandstone rock and ultimately create an impermeable freeze wall,
expected to be roughly 10 metres thick, surrounding the deposit on all sides and above, without freezing
the actual ore zone.
Due to the novel approach proposed for drilling of the freeze holes, there is risk that the Company may not
be able to complete drilling as planned, which could materially increase cost estimates.
See Figure 1 for illustration of Phoenix freeze cap
Processing of UBS
In certain conventional low-grade ISR operations, the concentration of uranium within the UBS recovered
from the well field can range from 30 to 50 milligra ms per litre (mg/L), which requires the use of ion
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exchange or solvent extraction processing circuits to concentrate the uranium and remove impurities for
efficient precipitation processes. The volumes of UBS subject to processing are also typically quite large,
due to the low-grade nature of the orebodies and the low level of uranium contained in the UBS recovered
from the well fields.
As part of the PFS process, Denison completed numerous metallurgical test programs to simulate the ISR
mining process, in accordance with industry standards – including leach tests, agitation leach tests, column
tests, and post mining column restor ation tests. All testing has indica ted that the Phoenix ore is readily
leached with a low pH (acid) solution, producing insignificant levels of impurities (i.e. arsenic, selenium) and
very high levels of uranium recovery (98.5%).
Due to the high-grade nature of the Phoenix deposi t, leach tests and column tests have consistently
returned uranium concentrations within the UBS recovered from Phoenix samples between 12 and 20
grams per litre (g/L) – which is significantly highe r than the level of uranium contained in the UBS
recovered from certain conventional low-grade ISR well fiel ds. At this level of concentration, much smaller
volumes of UBS require processing in surface facilitie s. As a result of the high uranium concentration and
low levels of impurities expected in the UBS, direct precipitation of the uranium is viable – which eliminates
the need for ion exchange or solvent extraction circuits , and translates into reduced capital costs, reagent
consumption, and operating costs during operations.
The PFS calls for the construction of a processing plant on the Wheeler River site, which has been
designed to receive UBS from the well field with a uranium concentration of 10 grams per litre and with total
throughput of 500 litres per minute. Taken together, this would allow for up to 6 million pounds U 3O8 in
annual production. The processing plant for Phoenix is designed as a closed loop system, meaning that
once the uranium is precipitated from the UBS, t he mining solution is reconditioned with reagents and
returned to the wellfield for re-injection and furt her mining. The use of the freeze cap and simplified
processing plant design eliminates the need for discharge of effluent during the process.
The simplified process flowsheet and processing plant design is based on the testing described above.
There is risk that the Company ma y not be able to achieve estimated results or may require additional
processing steps beyond those currently designed. This could have a material impact on project costs and
economics.
See Figure 2 for Phoenix process plant flow sheet sketch
Well Field Design
Conventional ISR roll-front uranium deposits are typi cally spread out over several kilometers. The low-
grade nature of these deposits combined with well spac ing, reagent consumption, and surface piping and
pumping distribution systems all contribute to create economic thresholds whic h impact the viability of
some deposits. At Phoenix, the ore is confined to a relatively small area (~1 kilometre x 50 metres) and has
proved readily leachable in laboratory te sting. As a result, infrastructure costs (number of wells, extent of
surface piping systems) and operat ing costs (reagent consumption) ar e expected to be significantly
reduced when compared to conventional low-grade ISR operations – which are already generally regarded
as the lowest cost uranium mining operations.
The well field design included in the PFS assumes the us e of vertical recovery, injection, and monitoring
wells, with a hexagonal pattern of injection wells surrounding each recovery well.
See Figure 3 for proposed Phoenix ISR well field configuration
Table 7 – Summary Phoenix ISR Wells
Number of Wells Drill Metres
Recovery Wells 94 40,420
Injection Wells 199 85,570
Monitoring Wells 17 7,310
Total 310 133,300